Reagan in the budget garden: pruning from edges of social security

If there ever is a sacred cow in the federal budget, it must be social security. Half of the nation's elderly depend on it for their livelihood. In all, 36 million Americans receive social security benefits.

It is by far the most expensive single program the US government runs, with a current (and rising) price tag of $138 billion. It also is one of the most difficult to cut back. As one congressional staffer put it, "You can't dot an 'i' or change a comma in social security" without running into trouble.

So it is no wonder that President Reagan has promised not to apply his budget knife to the core of social security's massive program. Instead, he is trying to trim around the edges.

Budget Director David A. Stockman has targeted three areas: survivor payments to college-age children, disability awards, and the guaranteed minimum payment that goes to retirees who spent only a short time in the work world or who earned low wages.

Capitol Hill is sending mixed signals on the Reagan cuts. Congress is not receptive to the idea of suddenly stopping payments that people are used to receiving. On the other hand, those watching the program want much bigger changes in the system, which is widely expected to run short of cash next year.

Rep. J. J. Pickle, the Texas Democrat who chairs the House subcommittee on social security, doubts that the three Stockman proposals will save much money. He also expects Congress to change them. HE says that:

* Congress might be willing to phase out the adult student aid over the next four years, but only "if we can be certain that there is a reasonable student loan program that is functioning even for the middle-income families." Other student aid has also been targeted for heavy cuts in the Reagan plan, however.

* On minimum benefits for retirees, "there is good reason to take a good, hard look," since it is aimed at the elderly poor who could be served by welfare instead.

* Congress has already taken some steps to tighten up the system for disability payments, and there are few more savings to be made.

Currently, social security pays workers who are judged medically unfit to hold any job. About four in every 1,000 workers fall into that category, and the annual cost is about $17 billion. The Reagan plan calls for weeding out those who are ineligible and for tightening the requirements for getting on the disability roll.

Recently, the Social Security Administration released a preliminary study showing that almost 20 percent of those on disability pensions don't qualify. The Reagan proposal points to the study as evidence of excesses in the program.

The Reagan administration view on minimum retiree benefits is similar to Congressman Pickle's. Its spokesmen point out that many of those receiving minimum benefits from social security also receive pensions. And a spokesman for the American Association of Retired Persons concedes that, for some retirees , the payment is a "windfall."

For an undetermined number of elderly, especially women, that benefit is a means of survival, however. And groups including labor unions and the National Organization for Women are defending it.

"We will consider [dropping] the minimum," says Pickle. But he added that Congress would be more likely to change the law for future recipients than to remove anyone now on the rolls.

But even if all three of the Stockman proposals survive their trip through Congress, they will not touch the heart of social security's financial problems.The real cause of its ballooning budget is the annual cost-of-living increase.

Every July, social security payments are adjusted to make up for inflation. Last year the raise cost $17 billion.

"We can't go on paying out these sums," says Congressman Pickle, whose subcommittee is now working on bills to overhaul the social security system to keep it from going broke.

"The Reagan changes are not big changes," says Pickle. "They are not big money savers." But he says that there is a "mood and spirit of willingness" to examine social security that he has not seen before. The program that largely escaped the Stockman knife is not off the shopping b lock yet.